Ohio Becomes 25th State to Expand Medicaid

Despite opposition from the Republican-controlled legislature, GOP Gov. John Kasich won approval to expand the program using an obscure oversight panel.

Members of Ohio Gov. John Kasich's cabinet during a controlling board meeting where expanding Medicaid under the Affordable Care Act won approval. AP/Julie Smyth

Ohio Gov. John Kasich got his wish Monday when a legislative oversight panel approved his request for $2.5 billion in federal money to expand the state’s Medicaid program in 2014, but conservatives are vowing a legal challenge.

Kasich, a Republican, went to the seven-member Ohio Controlling Board after the state’s GOP-controlled legislature refused to go along with Medicaid expansion in the two-year budget it passed earlier this year. That refusal, along with the addition of an anti-expansion clause that Kasich later vetoed, is integral to the legal arguments on both sides.

The state legislature created the Controlling Board in 1917 to adjust spending and handle other fiscal duties without calling the body back to session, but the panel has never been used to deal with an expenditure of this size. Members include one administration official and six lawmakers from both parties. Republicans have four of the seven seats on the Controlling Board.

Ohio House Speaker William Batchelder swapped his chamber’s two Republicans with last-minute replacements Monday morning. One of the new appointees, viewed by some as a moderate with less to lose politically, joined the majority for a 5-2 vote. Batchelder said in a statement that he made the change to prevent a competition between the two former members for a House leadership post from overshadowing the vote.

Last year’s U.S. Supreme Court decision left Medicaid expansion—a critical piece of President Barack Obama’s signature health care overhaul—optional among the states. The federal government is paying 100 percent of the costs for new enrollees before phasing down support to 90 percent by 2020. Most states currently limit Medicaid coverage to pregnant women, parents, children and the disabled. The expansion would cover childless adults earning up to 138 percent of the federal poverty level. In Ohio, that means upward of 366,000 new enrollees, roughly 270,000 of whom are currently uninsured, according to a Kasich administration report. Funding the expansion beyond this two-year budget cycle will take further action, either from the legislature or the Controlling Board.

The budget act at the heart of legal debate surrounding the issue left intact a provision allowing Ohio’s Medicaid director to appeal directly to the U.S. Department of Health and Human Services for expansion. That’s exactly what he did, and the department accepted the request. But accepting the federal money that comes with it requires either an act of the legislature or the Controlling Board.

Batchelder cited the Medicaid director’s authority in his statement after the vote. He argued that refusing the federal money while amending the program to accept hundreds of thousands of new enrollees would’ve bankrupted the program.

Kasich’s plan to use the Controlling Board has been pilloried by many of the state’s conservatives as a way to circumvent an elected body. Last week, 39 House Republicans—including Batchelder—issued a formal complaint in the chamber’s journal arguing Kasich’s move violates law forbidding the Controlling Board from acting against the legislature’s intent. That part of the law helped the Controlling Board survive constitutional scrutiny in a 1981 Ohio Supreme Court decision.

Conservative legal activists argue Kasich’s effort falls short of that standard, saying the legislature’s actions show an obvious intent. Supporters counter that the legislature’s objection never made its way into law after Kasich vetoed it and is essentially void. But Maurice Thompson of Ohio’s 1851 Center for Constitutional Law says he’s already drafted a lawsuit and could submit it as soon as Tuesday if supporters—some of them lawmakers—are ready to move.

“The only thing that could stop it is a political breakdown, if there’s some sort of thread or a political problem we can’t anticipate,” he said.

If the challenge fails to materialize or Kasich wins in court, Ohio could become the 25th state to expand Medicaid and the fourth controlled by Republicans. Most of the 24 states that have chosen to expand Medicaid did so through their legislatures. Several with Democratic governors, such as Kentucky, did so through executive orders. Ohio would be the first to go through an outside panel.